Co-op Group’s former boss Peter Marks today called the radical change in ownership of its banking arm “a tragedy”, but refused to take the blame for the ill-starred acquisition of the Britannia building society in 2009.
Marks told a meeting of the Treasury select committee: “I can’t take responsibility for something I wasn’t in full control of, which was the bank. I wasn’t driving the Britannia deal but I absolutely voted for it when it was proposed.”
He said he was chief executive of the parent group, and only a non-executive director of the “ring-fenced” Co-op Bank in line with the mutual’s unusual structure.
It came as the Co-op announced today that long-standing chairman Len Wardle will step down next May at the end of his term of office, having recently led the search for the group’s new chief executive, Euan Sutherland.
Co-op said on Monday it would hand over its banking arm to creditors, including US hedge funds Silver Point Capital and Aurelius Capital Management, to seal a £1.5 billion rescue of the self-styled “ethical bank”.
In often tetchy exchanges with MPs, Marks said it was “harsh” to say the Co-op Group had been weakened by events at Co-operative Financial Services. He said the group’s retailing arm had doubled profits in the final five years of his tenure.
But Andrew Tyrie, chairman of the committee, said the Co-op Bank comprised about 40 per cent of the assets of the mutual. “A good half of the Co-op has been wrecked by the other half?” Tyrie said.
Marks, who stepped down earlier this year after the Co-op’s failed bid for 630-plus Lloyds’ bank branches, agreed that “with a crystal ball” the Britannia acquisition was a mistake.
Britannia proved to be stuffed with bad loans, and there were chronic problems with the IT integration of the two mutuals.
But Marks said even though it looked the right strategy at the time he could not be held responsible as the acquisition was driven by then-banking boss, David Anderson.